Business ethics, stakeholder theory, and why I’m not in the software industry

I run a software development company. Our clients range from large to small, from highly innovative to risk-averse, and have one commonality: They are long-term partners. None of them started out that way, but all ended up that way. I believe that’s because our first passion is service, and software is the means through which we provide it.

Providing values-based service

The most tangible way to communicate our service values is by example. I use the example of companies offering a product like cars rather than a professional service like legal advice. Maybe this is because there are fewer layers to hide behind with a consumer product experience. A bad experience at a shoe store cannot be glossed over or delayed. It is apparent immediately, via a return, a complaint, a horrid Yelp review or an Amazon “one star.” Professional services are a bit more nebulous and tougher to gauge. Reviews are often much more subjective and complicated by context.

Take Tesla for example. Their mission is to accelerate the world’s transition to sustainable energy. Elon Musk started the company, estimating a 10% likelihood of success, because an electric car was simply the right thing to do. Even if Musk fails, he knows he has advanced the cause of cleaner energy and a better planet for future generations. His promise and commitment is to build only good cars. This means his cars don’t come out “on schedule” per se, as much as at the point at which they are good cars.

At Integrant we won’t build bad software. Sometimes this means going back, on our time (and sometimes, on our own dime) to refactor another vendor’s code or repair or address issues that are at risk of becoming problems down the road. Integrant will not leave our customers with a loose end or a “this is out of scope” excuse for poor quality or lack of strategic thinking. If something is wrong we will fix it. Full stop.

Costco is another example. They provide their members with quality goods and services at the lowest possible prices. Customers can return anything at any time for any reason (except certain electronics, which can still be returned for any reason within a 90-day period). But that’s only the end result. Behind the curtain: They protect their members and their employees, and treat their vendors with respect. They adhere to strict rules around ethical sourcing. Employee turnover is 17% where their next largest competitor is at 44%; and 98% of top hires are made from within.

At Integrant we take care of our employees. They’re the ones taking care of you, the client. Maslow’s pyramid: Don’t expect enlightened, pride-based service from someone who is struggling to make their rent. We pay our employees fairly, including benefits, a career path, mentorship and ongoing training. We give them the ability to make decisions on their own. We help them work through problems without dictating or disempowering. We encourage them to accept client feedback of any kind at any time for any reason. We stress that the measure of achievement is a stronger client relationship not a wider profit margin.

Finally, and of course, there’s Apple (well, Steve Jobs in particular). Apple may have strayed a piece since Jobs’ passing, but Apple’s success is based squarely on the goal Jobs articulated: “To make a contribution to the world by making tools for the mind that advance humankind.” Apple products are intuitive. But most impressive to me is the fact that they are as beautiful inside as they are outside. The customer doesn’t see the inside; the inside is aesthetically pleasing because Jobs’ passion was perfection in execution. He dreamed big not about being better, but about being completely, perfectly, different.

At Integrant, we write good code, period. Sometimes the client never sees it. Some parts of a project are more visible than others. At our core we don’t write code for the client. We write code that meets our own standards. Our clients are attracted to us because our values give them confidence. We do the right thing when no one is looking. That’s where good software comes from.

Stakeholder theory

Edward Freeman, business ethicist and author of “Stakeholder Theory of the Modern Corporation” proposes that a corporation’s stakeholders are anyone who is necessary to the survival of the firm and that includes consumers, employees, the community, and suppliers. He asserts that groups that may not be considered essential to a firm’s survival, such as competitors, governments, neighbors, etc. may also be considered stakeholders.

To apply this to Integrant, our competitors are stakeholders: If I misrepresent the time or cost associated with doing a good job, it impacts the relationship-building efforts of everyone in the outsourcing space. Our employees are stakeholders: If I fail to retain and inspire good, honest, smart programmers, our clients won’t get what they count on from us.

So when I invest in earning the trust of a new client (and I do so not infrequently, especially given the reticence many companies have learned to have around outsourcing software dev and test), I’m not investing in a revenue stream (though of course that is the result) as much as in living our company’s values. By doing so, we retain clients, employees, and morale. We are able to innovate with our clients and share their success.

If I expect and empower our employees to step up for our clients, we’re living our values, putting service before software, people before projects.

What ethics means to Integrant

Here are some questions we ask ourselves to ensure we’re pursuing our business values:

  • Are we committing to a budget or timeframe with the intent of winning the business or with the intent of coming through for the client, no excuses, no exceptions?
  • Are we recommending a tool because it is right for the client’s business goals or  because we are experts at it (if all you have is a hammer everything starts looking like a nail)?
  • If the client “didn’t ask for/doesn’t want/can’t afford that” but we know it is in the best interest of the client to pursue, have we considered investing on the client’s behalf?
  • Did we make a mistake that needs fixing? If so, have we created an environment where our employees feel safe enough and confident enough to say, “I don’t know,” “I could have done better,” and “Can you help me fix this?”

We write good code because our clients trust us to do the right thing. This is what motivates me, and why I consider myself to be in the service industry first and in the software industry second.

We seek to achieve a culture of compassion, internally and externally, with all people and all projects. How are we doing?

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